"Since the second half of this year, the closure rate of downstream stores has been rising. It's not just us; B2b businesses nationwide are struggling. The main reason is that small store businesses are greatly impacted by lightning warehouses." This is the common feedback from distributors during a visit to the Sichuan-Chongqing market. As major internet platforms increase their investment in instant retail, the density of lightning warehouses is rising, and many distributors feel a clear sense of crisis. A distributor friend told me that the emergence of one lightning warehouse can affect the business of seven nearby convenience stores and mom-and-pop shops. Categories such as family planning products, beer, general merchandise, and non-staple foods, which originally relied on terminal sales, are being eroded significantly by instant retail. "Lightning warehouses are taking food from distributors' bowls; we can no longer find growth points!" As a result, some distributors, adopting a "if you can't beat them, join them" mentality, are preparing to build their own warehouse stores. But can distributors really do well with lightning warehouses? After communicating with some distributor friends, I see the reality is that most distributors who built their own warehouse stores have not succeeded, while some who supply goods to lightning warehouses are doing quite well.

Distributors should not open warehouse stores themselves

The purpose of opening a lightning warehouse is to sustain the supply chain. If one warehouse can achieve 500,000 yuan in monthly sales, wouldn't ten warehouses bring 5 million yuan monthly?" said one distributor. This calculation sounds encouraging and fits distributors' past channel thinking—more stores, wider coverage, and larger scale mean more stable business. However, lightning warehouses are not a track where you can start and have business, nor is it a track where bigger scale means more profit. As a new business model focused on supply-demand matching and efficiency, its logic naturally mismatches with most distributors' existing capabilities.

First, product structure mismatch.

"Currently, in the cargo structure of lightning warehouses, general merchandise and daily necessities account for 70%. This design is to meet users' immediate emergency needs and to form the core profit source for lightning warehouses." A distributor supplying lightning warehouses told me that even top FMCG distributors' existing SKUs can cover at most 30-40% of a lightning warehouse's needs. Moreover, best-selling FMCG products are commonly used as low-price traffic drivers for lightning warehouse merchants, which further tests how distributors can support daily distribution and operational costs. Building a supply chain suitable for lightning warehouses is not an overnight task and clearly disconnects from existing business capabilities.

Second, business logic mismatch.

"Offline wholesale and retail businesses may earn less, but they won't lose money," said an industry expert. "Lightning warehouses are the opposite; they definitely have many orders that lose money." Loss-making orders are not a problem with lightning warehouse merchants' operations but are to maintain the core mechanism behind them—weight. For small orders of ten-plus yuan, fulfillment costs often exceed product gross profit. This kind of accounting, which shouldn't appear in offline operations, serves to increase weight in lightning warehouses, not to generate profit. And weight means order volume. The platform uses weight to determine how many orders a warehouse store can get; the higher the ranking, the larger the traffic pool allocated. For example, in a 3km business district, the top-ranked warehouse store can get 20% of orders, while the third-ranked might only get 10%. Competition between warehouses is not about service or customer relations but about real-time changing system scores. "Weight focuses on basic sales volume, traffic conversion rate, product quality, and other indicators. To do well on these, you need to spend money. Therefore, how to get the highest weight at the lowest cost is a rule many merchants study." When profit formation is driven by weight, distributors' original methodologies are hard to transfer. Experience-based, steady, and structural management often fails in the 'system-oriented' model of lightning warehouses, and may even miss platform traffic by over-pursuing single-product profits.

Third, scale effects are hard to form.

"Even if a distributor successfully builds one lightning warehouse, it's difficult to establish scale advantages by 'opening more stores.' Unlike e-commerce, lightning warehouses do not have diminishing marginal costs; instead, they are strictly limited by platform mechanisms." According to industry experts, the current platform has two important rules: one is 'not wanting a single dominant player,' even if a warehouse store operates well, the platform sets a traffic cap to avoid a business district being overly occupied by a single point; the other is 'giving everyone a chance,' even new warehouses with average capabilities receive basic order volume, giving them hope for continuous improvement. This means that a distributor doing well with one warehouse store does not guarantee that the second or third will naturally bring scale dividends. Traffic does not accumulate with more stores; instead, it is actively diluted by the platform. Meanwhile, the distributor's investment in labor, rent, and management costs will rise accordingly. In other words, in offline channels, more locations and larger scale mean more stable advantages; but in lightning warehouses, scale not only fails to create a moat but may become a burden.

However, lightning warehouses are not the opposite of distributors. Based on exchanges with multiple industry teachers, I conclude: When a new consumption entrance appears, there will always be value for local supply chains. Distributors should not open warehouses themselves but rather first play the role of 'supplier,' standing in a more advantageous position to support, serve, and even optimize the lightning warehouse business.

Distributors supplying lightning warehouses might be an opportunity

"There are now over 50,000 lightning warehouses nationwide, and the front end is increasingly competitive, but their back end still generally remains in a temporary patchwork stage." A distributor supplying lightning warehouses told me that the supply chain capability of lightning warehouses is still in a state of 'operational but not stable.' Their main procurement channels are 1688 and Pinduoduo, which seem cheap and convenient, but have obvious shortcomings. For example, in inventory, the biggest pain point is 'instability.' Product link failures, stockouts, or price increases force lightning warehouse merchants to constantly find alternative sources, which is time-consuming and can lead to 'same product, different quality' issues. On the other hand, if stock is low, inventory turnover is not timely; if stock is high, it can lead to overstock, and unsold goods cannot be returned or exchanged, directly transferring inventory risk to the store owner. It can be said that the more warehouse stores and SKUs, the more chaotic the supply chain feels. In these issues, distributors, as local supply chain players, can leverage their advantages by supplying lightning warehouses.

First, distributors can help lightning warehouses reduce ineffective inventory

Currently, lightning warehouses generally only achieve a 70-80% sell-through rate, and the remaining portion cannot be returned or exchanged, easily causing losses. In contrast, distributors have more flexible replenishment rhythms and inventory depth, so merchants don't have to stockpile as much, potentially saving half of their inventory capital pressure. This is the most direct burden reduction for lightning warehouses.

Second, distributors can solve the most headache-inducing after-sales issues of online procurement

After-sales from online procurement is often unsustainable—link failures, expired return periods, or store closures mean merchants have to bear the consequences themselves. But when sourcing from local distributors, whether it's returns, exchanges, damage handling, or consumer after-sales inquiries, someone can handle it. Currently, some suppliers have equipped professional customer service and prepared after-sales explanation videos for lightning warehouses, greatly freeing up the owners' energy.

Third, distributors can provide more professional product selection and merchandise management

Many lightning warehouses still use primitive product selection methods: they follow what others sell or decide based on a few online images. They can't see the actual product or judge quality, and once they choose wrong, problems like poor sell-through, difficult returns, and bad experience erupt together. In instant retail, where products change quickly and are highly seasonal and scenario-based, relying on experience or images for product selection easily leads to pitfalls. If distributors can provide structured product selection plans—from a pool of best-selling items, seasonal new product alerts, to complete material packages with main images and detailed descriptions—they can help merchants make product selection, new product launches, and merchandise management more controllable and efficient. Additionally, distributors' local sample displays can just fill the biggest pain point of online procurement: 'not seeing the actual product,' further reducing trial-and-error costs for lightning warehouses.

Fourth, controllable quality and 'customization'

A large portion of negative reviews for lightning warehouses comes from 'price comparison': consumers search Pinduoduo and find the same product cheaper by a few yuan or even dozens of yuan, naturally creating a psychological gap. What distributors can do is help merchants customize models, barcodes, and packaging to make products exclusive to lightning warehouses. When volume is large enough, they can also push manufacturers to improve quality, further reducing after-sales and complaints.

Final Thoughts

"The reason lightning warehouses can quickly take shape in a short time is the core matching of supply and demand, using extremely high fulfillment efficiency to meet consumers' immediate needs," shared the founder of a leading lightning warehouse brand during an exchange. As consumer demands become more fragmented and immediate, this not only requires reshaping supply chain and fulfillment efficiency but also represents a shift in market growth points from simple distribution to supply efficiency, service stability, and scenario matching.

For distributors, the opportunity lies not in blindly following trends to open warehouses, but in placing their strengths in the most suitable position—providing stable, continuous services and controllable supply. In this value position, they can form long-term competitiveness, provide certainty for market changes, and win the initiative for the next round of growth.

In March 2026, 'New Distribution' will hold the 11th China FMCG Conference and the 6th China FMCG Distribution and Retail Conference with the theme 'Advancing Toward C-End'!

At the same time, the Second Instant Retail Supply Summit and Instant Retail Warehouse Store Product Matchmaking Conference will be held, bringing together nearly a hundred lightning warehouse platforms to deeply discuss how to accurately seize controllable supply opportunities in a changing market.

If you are also thinking about how to transform in this new environment, welcome to scan the QR code to learn more about the conference and seize new growth opportunities together!

Ticket consultation: Zhuang Jiting